Office for an hour gets upside of commercial office doldrums

Office rental rates in Moscow fell by more than 40% in 2009, but even this failed to stimulate demand. But there is one bright spot in commercial real estate - the short-term lease is going from strength to strength.

A luxury office for a large business. But only for an hour. Karl Franzmann, Managing Director of New Markets Consulting, recruits Russian top managers for European companies. He says a short-term office lease for him in a city like Moscow is more of a necessity than a whim.

“Renting full-time offices in Moscow is very expensive. My business is relatively new and it’s important to keep fixed costs as low as possible. I only have to rent offices for maybe one or two hours as I need them.”

To rent an average A-class office in the centre of Moscow could cost you about $8 000 a month. And that’s without equipment, cleaning and security services. What's more, less than 20% of offices available in Moscow can be classified as "high-class."

The first “offices for an hour” appeared several years ago. They've become a good way to cut costs since the crisis hit. According to real estate analysts’ estimations, the market of one-hour workspaces makes up about 7% of all the entire rental operations. But Yury Taranenko, CEO of MIEL Commercial Real Estate sees the phenomena as a response to the times.

“I would hardly call it “a market” – it’s a tendency for the past year or two. It appeared due to a huge drop in demand for offices. More than a million square metres of office space is now empty. To make the offer more attractive, the owners divided big offices into small ones and made them ready to list on the market.”

Tatiana Sokolova, Founder of Delovoy Business Centre, says that as well as a fully connected office, with telephones and Internet, they are even ready to provide clients with “a team for an hour”.

“When you are preparing for talks, you suppose you may need a lawyer, an analyst, an economist or an accountant. We are working on creating a team of professionals who could give you all information for your needs.”

Market players are optimistic – they expect demand for express-offices to grow and anticipate clients’ wishes being a high flying executive – at least for a day.